How To Build a Powerhouse Startup Team: Hiring Strategies and Red Flags w/ Shefali | Doccla

Shefali Davda-Bhanot: 0:00

You know, financial readiness, for sure is, is like the number one thing that most founders or co-founders would really want to consider.

Shefali Davda-Bhanot: 0:09

And then taking opportunity costs into consideration

Anshika Arora: 0:11

Today, we're talking about what you need to consider when you're building out your initial team as a startup. We discuss the pros and cons of outsourcing versus hiring in-house, when is it the right time, or too premature, to hire, and also when to consider diversity metrics. We're honored to have Shefali on the podcast, who's the head of talent at Doccla, a Series B health tech startup. She has years of experience ranging across various VC-backed startups and brands. Her key areas of focus have always surrounded building the right talent pipelines, acquisition and retention, and also employer branding.

Anshika Arora: 0:48

I'm Anshika. I'm the founder of Eternity, a CRM designed to streamline the wedding industry for couples and businesses alike, and I'm so excited to be hosting the Baylab podcast today, which is powered by HSBC Innovation Banking. Let's get into it. Thank you so much, shefali, for joining us for today's BAE Lab podcast episode. I'm so excited to be talking to you about all things building your team as a startup, especially those first few hires, so let's get straight into it. So, starting off, what would you say is the right time to make your first hire? I think as founders, especially in the early stage, you often have that chicken and egg problem where you need the right revenue to actually be able to afford a team, substantial team but then equally, you need that team to help generate the product to generate that revenue. So I'd love to hear your thoughts on that.

Shefali Davda-Bhanot: 1:39

Thank you, Anshika, for having me. And you're absolutely right, it is that chicken and egg issue which most founders do face and it's not just kind of what to hire, it's the characteristics, it's the need. And so I'd say at this point it's this kind of balancing act for expansion for operational purposes, expansion, um for operational purposes, and looking at bottlenecks within your ops, um or the operational side of the business, but also kind of a longer term view as well, um, on the entirety of the business and where you foresee the business going um. So I'd say the right time should be very much based around revenue growth, um, the efficiency, so operational efficiency that is, and really trying to understand the opportunity cost of not hiring someone in that time.

Shefali Davda-Bhanot: 2:37

So whether that be missing opportunities, um, you know, because because your current setup doesn't have the right resource or the volume of resource that you need, and also founder burnout as well, because of course in the early days lots of founders actually do everything themselves, or co-founders, you know, working in conjunction with each other. They do everything themselves, working in conjunction with each other, they do everything themselves. So trying to kind of eliminate that kind of overwhelming feeling is really important at this point. But at the same time, understanding where the skills gaps might be longer term and hiring for scale, i.e hiring for generalists, is probably quite an important kind of thought process to have at this point. So maybe trying to find someone that could probably wear a few different hats is probably quite an important facet at this point. Um, but of course cost, you know financial readiness for sure is, is like the number one thing that most founders or co-founders would really want to consider. Um, and then taking opportunity costs into consideration. 

Anshika Arora: 3:48

Yeah, absolutely.I love what you've said there around your first hire, also wearing so many hats, because, as we know, founders and co-founders themselves are so used to wearing so many different hats, and I know that you've touched a little bit around financial readiness. As a startup, though, when it comes to making your first hire, what do you think about the balance of hiring someone who's perhaps a generalist, like a founder's associate or someone who can support you during the admin side of things, versus hiring maybe a specialist, for example, a sales specialist, who's actually going to be in a revenue generating role? I know that it's definitely a question that I always have and many other founders that I always have and many of the founders that I speak to. You never know if you should put that cost towards something where you might generate direct ROI, because obviously, admin and founders associates are kind of indirect ROI as well and they're just as important.

Shefali Davda-Bhanot: 4:37

It's a really personal circumstance in terms of where your business is at, so there's not kind of going to be a rule that fits all. It's going to be very much where your business is at and where you see the next kind of six to 12 months going I would say in those early days. If you as a founder feel that actually there isn't enough revenue and all the efforts so far by the team ie themselves or outsourced support it's not working, then it may be kind of prudent to look at the option of a revenue generating resource. Some of the companies that I've worked at have had the opposite problem. So at the moment I work for a VC-backed Series B scale-up called Doccla and they're a digital health company and they're not very old they're only five years old but they've seen great success quite quickly and when they started hiring for their first few hires their issue wasn't necessarily the revenue side, because actually they were doing okay not fantastic, but they were doing OK but really the bottlenecks for growth and for further growth and for opportunities to be captured was the operational efficiency.

Shefali Davda-Bhanot: 5:54

So as far as, as a part of what they do, they have to pack boxes there. You know, a part of their business is also in logistics, and this was a big bottleneck. So they had to find someone that was going to do that part but also do other things as well. And I think, kind of touching on the first point that you could have spoke about, was having. Obviously, the ideal scenarios is that this person could come in and contribute to a bit of everything you know enjoys that business development side or the customer success side. So the clients that you do already have, you're getting the most out of them, they're getting the most value out of those clients. But equally, operations isn't, you know, a bottleneck. I think that's, that's pivotal. So very much dependent on the business, the business size, where the businesses are. But if revenue isn't there, then I think a resource dedicated to revenue generation is probably quite key.

Anshika Arora: 6:49

Yeah, I like that. I like identifying the bottleneck, because it could be something completely different when you actually do that analysis and looking within in your business. I guess you've mentioned a little bit around outsourcing and there's such a common debate around should we actually hire in-house or should we outsource it? So, for example, should we get founders associate in-house or should we have a virtual assistant based elsewhere? Should we hire a tech team in-house or should we outsource it to freelancers? What are your thoughts on that? I'd love to hear it.

Shefali Davda-Bhanot: 7:20

It's very much like like with all kind of startups and scale ups. It depends where you're at. I quite like, when you're early stage, to have a VA, so a virtual assistant, who could actually probably cover quite a broad range of things for you administrative tasks, which will free up time for you to do other things that are required from you face to face, you know, and actually focus on revenue generation as a founder. The con with that is, of course, they're not going to be an extension of yourself. You know they're not going to be running mini projects for you. They're not going to be, um, you know, involved in any sort of business development or commercial activities. They are there for that administrative load that you would like to then delegate to um, whereas a founders associate, you know um, typically in the experience that I've had, we've hired founders associates that are fairly qualified and have aspirations themselves of becoming founders one day and want to understand that scale up and that startup journey and go through it with the founder really close by as their right hand person, so that they can um that they, that it kind of equips them to do their own thing at some point.

Shefali Davda-Bhanot: 8:43

Um, and this might be right, from, like I mentioned in Doccla’s situation, packing boxes right through to being involved in discussions with investors and um analysis and research of investors that are, you know, going to be helpful and contribute other than the financial side of things.

Shefali Davda-Bhanot: 9:05

So founder’s associates, I'd say, are incredible to have an incredible asset to have in any sort of business, but it can be quite costly.

Shefali Davda-Bhanot: 9:16

So you know, I think you know, within a year or two, you know salaries do tend to go up and they, you know I think that's something that founders should bear in mind that you know these are really valuable and kind of really knowledgeable individuals that are coming into the business, potentially having other offers on the table from investment banks and you know quite, quite highly paid graduate roles that they may have foregone to join their startup and taken a pay cut for, but with the premise that they get the knowledge and a potential pay rise a little bit later on in their journey. So I think that's really, I think it's prudent for founders to know that, whilst they get so much fantastic value out of FAs in the initial days. If you know things are tight and they themselves may not be taking a salary, then perhaps a bachelor's assistant may be the way forward for them.

Anshika Arora: 10:16

Yeah, well, exactly to that point, founders a lot of the time, especially in early stages, do forego their own salary. And what are your thoughts around when you may be feeling stretched and you know that you need a resource and you may or may not be generating revenue and if you are, you may or may not be paying yourself at what point do you think founders should continue to forego their salary when it comes to making a new hire? And what I mean by that is, if you're not paying yourself, should you actually bring someone on board and pay them? Or, in your experience, have you found that's motivating, demotivating? I'd love to hear about the pros and cons around that.

Shefali Davda-Bhanot: 10:52

It's a funny one, because when you're a founder you, you obviously own, you know the business. So that's that's a high incentive to to make it work, versus if you're an employee, which of course you know, when you're in startups and certainly tech startups you may well have options in the company or equity in the company. So there is that motivator and that is an option of a way in a route to higher early stage as well, where you either give someone a really low salary and give them quite a lot of equity, or vice versa. To answer your question, it's a tough one and very much a personal circumstance to the respective founder.

Shefali Davda-Bhanot: 11:33

Some of the founders that I know, whilst they don't take a salary through the business, have tried to curate somehow a side hustle of some sort or some sort of financial stability for themselves. So, whether that be through property income and, you know, rental income, whether that be through selling products on amazon, whether that be through um kind of weekend work or consulting work on the weekends, somehow they have created some sort of financial stability. I mean, in some instances it really is. Perhaps if they're with someone, then they might be leaning on those respective partners or parents. You know, and it's why we hear so much of you know, when you kind of look back at some of these Silicon Valley startups, a lot of those journeys begin from parents' garages or parents' homes or childhood bedrooms. And this is the very reason, so that they have the financial bandwidth to sustain themselves, forego a salary, so no rent, you know minimal outgoings, you know minimal outgoings and that way pour everything into the business, including perhaps hiring their number two. You know employee number two.

Shefali Davda-Bhanot: 12:51

And again, when things progress, if there is some sort of revenue along the way, it's still seen that most founders don't necessarily take a high salary. They still take a reasonable salary to cover basis and cover basic costs at home. Um, and that is so. You know that they can. They can elevate the business, they can keep growing the business. And of course it's different when you're a vc backed startup, because then you know there's there's a bit more kind of um regulation there and you know it's important to take a salary at that point because you're probably starting to build out quite an expensive team at that point. But until there's been some sort of kind of revenue generation and commitment, I think it's fairly common for founders not to take a salary or to take a fairly modest salary.

Anshika Arora: 13:47

Absolutely and actually on that note, what do you see as some very common red flags that founders do when it comes to making either their first, second, third or even tenth hire one?

Shefali Davda-Bhanot: 13:56

One of the examples that you know springs to mind is kind of founders getting quite excited by big names in the industry. So, like they, they, you know, if you're trying to hire perhaps you know, your first tech hire they may well see Facebook or Apple on a CV and it, you know it's, it's the thought of someone from one of these prestigious companies. You know, one of the fangs joining your organization's fairly exciting. But what's not necessarily assessed at that point is how suitable and how adaptable they are to working in a startup environment. And I think businesses have changed with time. I think this was certainly really relevant, like this point was very relevant, you know, perhaps five years ago. There's been a lot of learnings from other startups now because that whole ecosystem has developed a little bit more, um, but certainly five, ten years ago, um, this was very much the case where this was a big red flag, where you'd hire someone from quite a large organization, a large corporate, established company, with policy, with protocols, with process, with teams, and then someone coming into you know what may essentially be a one person band is a very different scenario and there is a struggle there, because it certainly could be a struggle there, because people from larger organisations generally have a support network. You, you know they can delegate lots of tasks out to other people and there's a sense of kind of soundboarding with other team members and they may not actually be doing the work themselves. Most of the startup CTOs head of engineering um, you know engineering managers they're all hands-on. You know it's, there's no aspect of someone taking a strategic role in a startup. Everyone is doing and contributing to to the actual work, as opposed to kind of managing managers and so on.

Shefali Davda-Bhanot: 16:00

So I think this is quite a big one to look at when you know, like a red flag that I'd see in the past.

Shefali Davda-Bhanot: 16:08

Um, another one is startup experience, which kind of semi-covered in the first point, but it's certainly very relevant today as well that having people with you know both startup and scale-up experience is so important, um, so that they've experienced that wearing of many hats, the experience of lack of structure and policy which can be frustrating for employees. So I think that's those are two of the really big red flags and I think, lastly, salary as well, because I think in the initial we you know as a business, as a business, as a startup business, you might be able to offer a decent salary, but that might not necessarily come with lots of pay rises moving forward and lots of progression moving forward, because in a small company, there's only going to be, you know, a certain ceiling that you hit, and I think that's really important to cover during the interview process as well. That you know, as the company scales, there may well be opportunities, but for now, this, this, is what the opportunity is. So those are the three points I'd say.

Amardeep Parmar: 17:18

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Anshika Arora: 17:53

That's so helpful and I think everything you've mentioned there is something that all founders who are listening to this can kind of take forward in for any interviews that they're doing with their first few hires, because they're all points that you should lay out on the table quite early on, especially the point around you're going to be in a doing role, not in a strategy role, to begin with, and this is the highest rank that you're probably going to get if you're joining as a CTO. And so very, very helpful tips there. Thank you, Shefali. And I guess last but definitely not least, I want to touch a little bit on diversity, because we see it so much in larger corporations, we see it so much with on your cap table, making sure you have the right diversity metrics.

Anshika Arora: 18:33

I want to talk about it when you're a startup, because I think hiring for a startup I've experienced firsthand can be quite difficult because you need the fit of the right person, who's used to all of those things, like you said, who's the right salary band, wants to be a doer and sees really that vision and mission early on. And how do you balance that from a diversity point of view when you're hiring as a startup? Say you're a solo founder or co-founders, are these metrics that you should set in stone to begin with and communicate perhaps to your investors? Are these ones that you should have in the back of your head, kind of how? How does that play a role when you're when you're making the first few hires?

Shefali Davda-Bhanot: 19:09

Sure. So I think, generally speaking, the, you know, the rule of thumb is hiring the best person for the job and and you know, keeping of course in mind, diversity is important, um, but at the same time, it's the, the skill and the practice that they bring to the table. That should be kind of the reason that they're hired. So that's the number one point. And diversity metrics come from quite a broad range. It's anything from kind of gender to race to, you know, socioeconomic backgrounds to demographics, so it's quite a broad range. And when I speak to, you know, when I speak to candidates now within my role, it's something I cover within the interview process because for some people this is a really important facet. So it's not just for investors, it can be to also attract other people into the business as well. And I think, whilst it's not just for investors, it can be to also attract other people into the business as well. And I think, whilst it's important in your initial hiring, you know, as it should be, because it's at the back of your mind as a founder hiring the best person should always be the decision maker there, not necessarily you know where they live or you know how they identify themselves, um. So I'd say, whilst it's an important kind of facet to keep in your mind, and as it's probably less relevant when you're hiring one person, but certainly more relevant when you're hiring a whole team of people, so that you're getting a sense of, you know, a real sense of diversity of thought onto your team.

Shefali Davda-Bhanot: 20:45

And I think that's the emphasis that diversity brings bringing different people from different walks of life together in you know, one space to have different opinions on matters, because that's when magic happens, that's when creativity happens, when you can have different, you know, kind of rational conversations about things that you might not agree with and come to a resolution on what would look good.

Shefali Davda-Bhanot: 21:09

And that's the whole purpose of why investors and general VCs, but also other people, are interested in diversity metrics and to have a sense of belonging as well.

Shefali Davda-Bhanot: 21:25

And to have a sense of belonging as well, um, but certainly more relevant when you're at a later stage you know it's kind of seed onwards really when you've got a slightly bigger team and um, important to at that point, have a look at who's on the table, who's having these discussions about where your product is going, and and an example I really I love is um is I can't remember which car manufacturer it was, but there was a story around the product team building a seatbelt that was only suitable really for a male and male body types, etc. There's also another kind of anecdote with Apple, where Apple originally made quite large iPhones that wouldn't necessarily fit in. Perhaps you know a female hand, so you know there's lots of reasons for having diversity. You know gender, age, demographic, and I think those certainly start to kind of become more relevant and more prevalent as your, as your company is starting to grow more relevant and more prevalent as your, as your company's starting to grow.

Anshika Arora: 22:26

I love that. Thank you so much if you've given us such tangible, actionable pieces of advice in this day, and I'm so glad that we got you on. Of course, as we wrap up for the BAE podcast, we always have questions that we ask everyone who attends um, which some may find easier than others to answer. But firstly, I want to know who are three Asians in Britain doing incredible pieces of work that you think the audience should check out?

Shefali Davda-Bhanot: 22:49

I think there's definitely more than three. So you know, forgive me if I start to reel off a whole register and a whole roster of names. I think the first one that I'd love to name is an Iranian refugee who is really well known. Actually, they're not like a, they're not an underdog, they are really well known in the tech space. Um, it's Ali Parsa. So Ali Parsa is was the CEO of a company called Babylon Health, who I worked with quite closely for um, for about two and a half years of of my, and he was an extremely still is an extremely inspiring individual, not just for the fact that he created one of the first unicorns within digital health in the UK, but also learning resilience from him. So he floated his company onto the stock exchange and, you know, the company did well for a little while and then didn't do so well, as we see with companies, and I think the important thing here is that he's not let that affect him and he's literally just in the last kind of few days announced his new venture, which I may well mispronounce, but I think it's called Quadrivia. So you know he's kind of come back onto the scene and I think that's absolutely fantastic, so inspiring and so telling of his character and definitely one to watch as, I think, one of Britain's greatest entrepreneurs. So he would be my first.

Shefali Davda-Bhanot: 24:23

The second I'll kind of do as a dual uh, because it's a personal one. Um, so the you know that would be my brother-in-law, actually, um Varun Bhanot, who is the founder of a business called Magic AI, and this has come from a really personal journey from him, where actually he was a little bit overweight and he invested a great amount in his own well-being, his diet, and has henceforth created a mirror, an AI mirror, which is, in essence, an AI personal trainer so you can exercise from home in your own space, and I think that's hugely inspiring. Taking something that you've had a problem with in the past and turning it into a solution is hugely inspiring. And, notwithstanding, I've seen him go through that whole journey from building startups. So I think definitely someone to watch and a business to watch.

Shefali Davda-Bhanot: 25:29

And then, out of the tech space, I would say a business to watch is WYNLegal, who is making strides within the legal sector and incorporating tech within quite a conservative industry and, lo and behold, the founder is my husband. So, again, quite a personal one. So I'll keep the two together, given we only have three options. And the third is Rupa Ganatra Popat, who has actually come on to one of your podcasts, I believe, in the past, and she supports female entrepreneurs. She's founded her own VC and I think within the VC community there is generally a lack of females, but with certainly within the tech industry there is. And then when you kind of look further into tech in itself, it gets smaller and I find it hugely inspiring, you know, just kind of listening to her career, seeing where she's at now and her growth. For me, that's, that's hugely inspiring. So those are, I'd say, are my three, slash three and a half we'll allow it.

Anshika Arora: 26:49

Thank you. And how can the audience find out a bit more about you and your company?

Shefali Davda-Bhanot: 26:53

Sure, so, um, I can be reached, uh, and I can be seen on LinkedIn fairly often, um, and that's where I you know, kind of, um, I'm quite well networked and can certainly be um kind of checked out, as it were, on a work capacity. Um, I work for a company called Doccla and they have their own website, but equally, um, I have more information on my LinkedIn about them as well. Um, they are a digital health organization. They provide virtual wards and remote patient monitoring, and it's a real sweet spot of mine to work for companies with a social impact and a social mission, and this certainly serves that purpose. So you can check them out on their website or on my LinkedIn.

Anshika Arora: 27:42

Amazing. Thank you, Shefali, and what can our audience do to help you?

Shefali Davda-Bhanot: 27:45

What can the audience do? I would say support and elevate and empower each other. You know, I think building a community, you know, around each other is really important and I think by them doing that it supports all of us, not just individually, but it supports all of us, as you know, not just individually me, but, you know, supports all of us as a community. Um, as a female, and I'd say kind of um, the work that BAE is doing is already doing that, so I'm sure that the audience that you've captivated would certainly  be interested in that. So I'd say keep going, BAE, and and and, you know, and obviously to the audience, keep watching as well, because it helps to elevate others.

Anshika Arora: 28:29

Absolutely. Any final words from you?

Shefali Davda-Bhanot: 28:31

No, thank you. Thank you so much for your time. I really appreciate it. Thank you so much. It was wonderful having you on.

Amardeep Parmar: 28:38

Thank you for watching. Don't forget to subscribe. See you next time.

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